Method and apparatus for conducting electronic commerce transactions using electronic tokens

ABSTRACT

Methods and apparatus for conducting electronic commerce using electronic tokens are described. The electronic tokens are issued and maintained by a vendor, who also provides products and services that can be purchased or rented using the electronic tokens. The electronic tokens may be purchased from the vendor either on-line, using a credit card, or off-line, using a check, money order, purchase order, or other payment means. Because the vendor is the issuer of the electronic tokens, there is no need for transactions to be handled by a third party, such as a bank or other organization. This reduces the overhead involved in conducting electronic commerce, and provides the vendor with a greater amount of control. Additionally, the vendor maintains total control over the price of the electronic tokens at any time. For vendors who offer software products for sale or rental, use of electronic tokens makes a variety of rental arrangements practical including rental for short periods of time, for a specific number of uses, or for a specific number of processing.

RELATED APPLICATIONS

This application claims priority from U.S. patent application Ser. No.09/553,695, filed Apr. 21, 2000 now U.S. Pat. No. 7,177,838, and fromU.S. provisional application Ser. No. 60/178,239, filed Jan. 26, 2000.

FIELD OF THE INVENTION

The present invention relates to methods and apparatus for conductingelectronic commerce using electronic tokens. More particularly, thepresent invention provides a means to purchase, rent, or extend therental period on software or other products and services usingelectronic tokens, which may be purchased either on-line or off-line.

BACKGROUND OF THE INVENTION

Electronic commerce using the World Wide Web (Web) is exploding ingrowth. Many Web sites have been developed through which Web serviceproviders may advertise and offer a variety of products for sale. Aselectronic commerce becomes popular, increasing numbers of vendors areoffering a variety of products and services on the Web. Among thesevendors are software vendors, known as application service providers(ASPs), who provide software for sale or rental over the Web.

Software products being offered by an ASP are typically displayed at thepurchaser's client computer. The display may include a description ofeach software program and a price for the software. As the purchasersends a request to purchase software programs to the ASP server, theserver must interact with the client system to confirm the purchases andthe payment method. When the ASP server accepts the purchase order andthe payment method, the ASP server will download the software productelectronically to the purchaser's client computer. To preventunauthorized use of the software product, each software product istypically protected by encryption, usually referred to as a softwarelock (or key).

Upon successful completion of the purchase transaction, the ASP willdownload a decrypted version of the software or an authorization codewhich will “unlock” the software for the purchaser if the software beingpurchased is already installed on the purchaser's client computer. Thelatter situation may exist if the rental period of the software producthas expired and the purchaser wishes to extend its use.

Since some software products are relatively expensive or use of aparticular software product may become obsolete after a period or numberof uses by a purchaser, the purchaser may want to rent the softwareproduct instead of purchasing it outright. Thus, the software may berented for use for a certain period of time or for a certain number ofuses. For example, it may be preferable to rent computer games ratherthan purchase them, since computer games often lose their interest andappeal after repeated playing. Additionally, a purchaser may wish torent the use of a software program that is used only occasionally, suchas a language translator or document clean-up or editing software. Therental of software thus provides users a relatively inexpensive andeconomic method to use software.

When a user finds that he is using a piece of rented softwarerepeatedly, it may be desirable to extend the rental period, or toconvert rented software to permanent use. An ASP may, therefore, offerusers the ability to purchase additional uses of a software product,extend the rental period of a software product, or convert rentedsoftware to permanent use. These operations are typically achieved bysending the user new authorization codes or keys that enable thesoftware to continue operation until the new number of uses or timeperiod has expired. By providing only a new authorization code or key,the ASP avoids having to re-download the software to the user'scomputer.

As the use of an ASP becomes more popular, the interaction betweenpurchaser client computers and ASP servers will become much morefrequent. Therefore, it will be desirable for ASPs to provide theirpurchasers the convenience of minimizing the requirement for interactionbetween a client computer and the ASP server in order to complete thepurchasing or rental transaction, as the case may be. It would also bedesirable for ASPs to minimize or limit the frequency of asking thepurchaser to transmit the user's private, sensitive information, such ascredit card information. Although the purchaser's credit card number isencrypted during the transmission, it will be highly desirable tominimize its exposure through the Web.

Additionally, some software rentals may have a very low cost. Forexample, renting a single page use of a translation package may costless than the typical fees associated with processing credit cardtransactions. Such “micropayment” transactions, sometimes amounting toonly fractions of a cent, may also occur in the context of providingaccess to media, or Web-based services, such as search engines. In eachof these cases, it is necessary to provide a way for users to pay forsuch transactions without incurring the overhead of a credit cardcharge.

Similar demands are present for vendors of products and services otherthan software. While there may be many consumers on the Web interestedin purchasing or renting a wide variety of products and services, manyof these consumers are either unwilling to take the risk of using theircredit card over the Internet, or do not possess a credit card that maybe used to make purchases on the Web. Additionally, some products andservices available over the Web are small enough in cost that they donot justify the overhead of handling credit card transactions.

To address these concerns, various forms of electronic currency havebeen developed and marketed by numerous companies. For example, eCashTechnologies Incorporated, of Bothell, Wash., offers a product called“eCash”, which relies on encryption and digital signature technology topermit selected “eCash” banks to issue “eCash” currency to users, whichmay be spent on the Web sites of vendors who will accept this “eCash”.These vendors may then exchange the “eCash” for traditional moneythrough an “eCash” bank. The use of “eCash” permits micropayments, andpermits users to purchase products and services on the Web without usinga credit card.

The “eCash” system, and other similar systems, eliminate the need to usea credit card for each on-line transaction, and permit micropayments.Such systems require that users and merchants make arrangements withauthorized banks, and require both the user and the merchant to convertbetween real currency and electronic currency through an authorizedbank.

Another system is provided by RocketCash Corporation, of Mountain View,Calif. The RocketCash system sets up accounts for teens who do not havecredit cards, and permits their parents to add money to the accountsusing checks, money orders, or credit cards. A teen may then shop on theWeb, and have the purchases billed to his or her RocketCash account.This eliminates the need for credit cards, but does not addressmicropayments. Additionally, it is still necessary to establish and fundan account with a single central entity (i.e. RocketCash Corporation)before goods may be purchased.

InternetCash Corporation, of New York, N.Y., offers a similar product,called InternetCash™, based on pre-paid card that is purchased inpre-determined denominations from a store, and may be used at selectedon-line merchants. The InternetCash™ system can handle transactionssmaller than will be processed by most credit cards, and provides ameans to anonymously purchase items on the Internet, without using acredit card. Like other previously known electronic currency systems,InternetCash™ requires merchants to obtain payment from a centralorganization.

Another electronic currency, called “Beenz”, is provided by Beenz.com,Inc., of New York, N.Y. The “beenz” system permits registered users toearn “beenz” currency as an incentive for visiting particular Web sites,shopping on-line at particular Web sites, and other on-line activity.The currency “earned” by these activities may be spent at selected Webvendors. This system, while it does not use a credit card, and may beused for micropayments, is not well suited to more general use, as thereis no way to purchase the “beenz” currency. Additionally, as in theother examples cited above, vendors must rely on a single organizationto receive payment in real money.

Numerous patents on electronic currency have been issued. Among theseare U.S. Pat. No. 5,983,207, to Turk et al., and U.S. Pat. No.5,671,364, to Turk, which discuss electronic currency systems based ongold or some other commodity held at a central location. U.S. Pat. No.4,977,595, to Ohta et al., describes cryptographic techniques that maybe used by a bank to issue electronic cash. Like the other systemsdescribed hereinabove, the methods described in these patents usecentral organizations, such as banks, to manage user accounts and tohandle transactions.

Such systems necessarily impose overhead, in that both the vendors whoaccept these various forms of electronic currency, and the users who buyitems in exchange for electronic currency must deal with a centralorganization, such as a bank. Additionally, since the centralorganization controls the issuance of the electronic currency, thevendors who accept the electronic currency have no control over thevalue of the electronic currency, its sale price, the terms on which itmay be bought, or to whom the electronic currency is sold. For example,it is not possible using such systems for a vendor of products orservices to agree with his customer on payment terms for electroniccurrency that will be used to purchase goods, since the customer mustpay a bank or other third-party organization for the electroniccurrency.

In view of the above, it would be desirable to provide apparatus andmethods that permit a variety of payment options, such as credit cardpurchases, checks, money orders, or purchase orders to be used topurchase electronic currency or tokens.

It would also be desirable to provide electronic currency or tokens thatmay be issued and used with minimal overhead, and that do not requireon-line communication with a bank or other organization to issue or usethe tokens.

It would further be desirable to provide apparatus and methods that givea vendor complete control over the sale and distribution of electroniccurrency or tokens that may be used to purchase products and servicesfrom that vendor.

SUMMARY OF THE INVENTION

It is an object of the present invention to provide apparatus andmethods that permit a variety of payment options, such as credit cardpurchases, checks, money orders, or purchase orders to be used topurchase electronic currency or tokens.

It is also an object of the present invention to provide electroniccurrency or tokens that may be issued and used with minimal overhead,and that do not require on-line communication with a bank or otherorganization to issue or use the tokens.

It is a further object of the present invention to provide apparatus andmethods that give a vendor complete control over the sale anddistribution of electronic currency or tokens that may be used topurchase products and services from that vendor.

These and other objects of the present invention are achieved byproviding apparatus and methods that permit a vendor to directly issueelectronic tokens that may be used to purchase products and servicesfrom that vendor. A Web site maintained by the vendor is provided withthe added ability to sell electronic tokens to users of the Web site inexchange for payment in a variety of forms. Electronic tokens purchasedfrom the vendor are kept in a user account in a database that ismaintained by the vendor.

Because the vendor himself is the issuer of the electronic tokens, hemay choose to issue the tokens in exchange for any form of payment thathe is willing to accept. The methods and apparatus of the presentinvention support both on-line payment (e.g., using a credit card), andoff-line payment (e.g., using a check, money order, or purchase order)for electronic tokens.

The vendor lists the prices of products and services offered on his Website in terms of electronic tokens. Because the vendor is the issuer ofthe electronic tokens, in formulating these prices, he may set the valueof the tokens to any level that he chooses.

Users purchase or rent products and services from the vendor's Web pageusing the electronic tokens. After a user chooses a list of products orservices that he would like to purchase or rent, the system of thepresent invention checks to see if the user's account contains asufficient number of tokens to complete the purchase. If there areenough tokens in the user's account, the tokens used for the purchase orrental are subtracted from the user's account, and the purchase orrental may proceed. Otherwise, the user is given an opportunity topurchase additional tokens to cover the price of the products andservices he desires.

If the vendor is an application service provider (ASP) who sellssoftware for download, the methods and apparatus of the presentinvention permit the software to be purchased, or rented for a varietyof terms using electronic tokens. Software may be rented for aparticular time period, a number of uses, or a number of processings.Each of these forms of rental may be initiated or extended in exchangefor electronic tokens. Extension of a software rental, in which therented software is already installed on the user's computer, requiresonly that the user download a new authorization code for the software,rather than downloading the entire software application.

The present invention also provides methods for transferring electronictokens between users. Additionally, methods are provided for handlingpurchases on an auction site using electronic tokens issued by theauction site.

It is also an object of the present invention to provide the apparatusand methods permitting a user registered at one vendor Web Site usingelectronic tokens to purchase products or services from another vendorWeb Site that also uses electronic tokens for business transactions.

It is also an object of the present invention to permit a userregistered at a vendor Web Site that sets electronic tokens at one valueto purchase products or services offered by another vendor Web Site thatsets different values for his electronic tokens.

Further, it is an object of the present invention to provide anapparatus and methods to keep accurate records of electronic tokenstransferred and converted from one vendor's Web Site to another vendor'sWeb Site. Therefore, the system would allow one vendor to pay the othervendor the value of the electronic token so transferred and converted.

It is another object of the present invention to provide an apparatusand methods to supply one vendor's user's name, address and otherinformation necessary to another vendor's Web Site. This would permitthe user of one vendor to automatically register with another vendor'sWeb Site, providing the convenience for the user that he is not requiredto register with another vendor's Web Site.

It is another objective of the present invention to keep a record oftokens already paid, tokens to be paid and free tokens issued. Thisallows the vendor to further issue free tokens for a user with many paidtokens, as if he is earning interest on the paid but unused tokens.Furthermore, free tokens issues are, in general, intended for a user topurchase additional products and services from the issuing vendor, notfor transferring to another vendor. Keeping a record of free tokensissued allows a vendor to prevent such transfer.

It is yet another objective of the present invention that the vendor maydisplay the cost of products or services offered at his Web Site interms of electronic tokens simultaneously in equivalent cash values inorder to assist the user to associate the cost of the correspondingproduct or service more easily. Furthermore, it is yet another objectiveof the present invention that the user may choose to purchase items andservices using electronic tokens or credit card.

Since the vendor using tokens has complete control to set the price ofeach token and to issue free tokens under various conditions, the vendormall itself is a “closed system.” The MSP of the method and system, asinvented, serves to connect various vendors, allowing a user to purchaseproducts and services from any member vendor malls. Therefore, it isclear to say that the method and system invented here makes a group of“closed systems” and creates an “open system.”

BRIEF DESCRIPTION OF THE DRAWINGS

The above and other objects and advantages of the present invention willbe apparent upon consideration of the following detailed descriptiontaken in conjunction with the accompanying drawings, in which likecharacters refer to like parts throughout, and in which:

FIG. 1 is an overview of the networked environment in which the methodsand apparatus of the present invention are used;

FIG. 2 is a diagram of the software executing on a server built inaccordance with the principles of the present invention;

FIG. 3 is a flowchart of a method for establishing a user account;

FIG. 4 is a flowchart of a method the permits users to purchaseadditional electronic tokens, either on-line or off-line;

FIG. 5 is a flowchart showing a method for verifying that a user has anaccount, and for initiating a shopping session;

FIG. 6 is an example screen from an application service provider,showing categories of software available for sale or rental;

FIG. 7 is an example screen from an application service provider,showing various types of software rental or purchase that are available;

FIG. 8 is an example screen from an application service provider,showing an order list containing software rentals and purchases thathave been selected by a user, to be paid for using electronic tokens;

FIG. 9 is an example screen from an application service provider,verifying the user's order;

FIG. 10 is a flowchart showing a method for verifying that a user hasenough tokens to complete a purchase;

FIG. 11 is a flowchart of a method for transferring electronic tokensfrom one user to another;

FIG. 12 is a flowchart of a method for verifying that use of rentalsoftware is authorized;

FIG. 13 shows an embodiment of the present invention for use on anauction site, in which electronic tokens are used for payment;

FIG. 14 is an overview of the process in which a user registered andpurchased electronic tokens from a vendor, Mall-A, then purchasesproducts or services offered at another vendor, Mall-B, by transferringelectronic tokens of vendor, Mall-A, to electronic tokens of Mall-B,through the Mall Services Provider (MSP);

FIG. 15 is an overview of the process in which a user registered at afranchised mall purchases products offered at another franchised mall;and

FIG. 16 is a sample web page where prices for items offered for sale arelisted in electronic tokens and equivalent cash value. Also, it displaysa choice for the user to make the purchase either in electronic tokensor by credit card.

DETAILED DESCRIPTION OF THE INVENTION

The present invention provides a method and system for conductingbusiness transactions in a networked environment using “electronictokens” (or “tokens”) as a price for each item or product being offeredfor sale or rental by a vendor. As a user creates his order list, thetotal number of tokens required (RT) is constantly updated and displayedtogether with the user's available tokens (AT). To complete the businesstransaction, the user can simply click on order and order confirmedbuttons on the display. The total number of tokens used for purchasesare subtracted from the user's available tokens (AT) which is alsoupdated and displayed at the client computer.

Since electronic tokens are used for the business transaction, the needto transmit the user's credit card number and other personal sensitiveinformation between the user's computer and the vendor's computer foreach transaction is eliminated. Thus, the method and system of thepresent invention provides users the convenience of minimizinginteractions between the user's computer (the client computer) and thevendor's computer (the server) thus reducing overhead. Furthermore,security for the user's personal sensitive information is improved.

Additionally, since the electronic tokens are issued directly by thevendor of the software or other products and services on which thetokens may be spent, rather than by a bank or other centralizedorganization, the vendor retains control over issuing and redeeming thetokens. The vendor is able to make whatever arrangements he or shedesires for payment for the tokens, including both on-line (e.g. creditcard) and off-line (e.g. check, purchase order, billing) transactions.It should be noted that as used herein, a vendor includes anysubsidiaries, affiliates, and other corporate entities or personsauthorized by the vendor to issue tokens.

The methods and system of the present invention do not require that anypayment be made using the user's credit card. Of course, the user hasthe option of using a credit card to purchase tokens using the on-linemethod, but may avoid use of a credit card by using the off-line methodfor purchasing tokens. Because the user need not use a credit card forhis purchases, it is unnecessary for the user to have a credit card, orfor the user's computer or the vendor's computer to interact over thenetwork with a bank or other financial institution to process creditcard transactions. Additionally, since orders can be handled withoutcredit card transactions, the overhead associated with such transactionscan be reduced or eliminated, permitting micropayments. Further, sincesmall purchases are paid for in tokens, the vendor need not send out aninvoice or incur other overhead involved in handling financialtransactions with small purchases.

A further benefit of using the vendor-issued electronic tokens of thepresent invention is that privacy risks are decreased. Since allpurchases or business transactions are done using tokens, very little orno personal sensitive information, such as the user's credit cardnumber, need be transmitted over communication lines, such as theInternet. Although information transmitted via the Internet may beencrypted, it is still desirable to eliminate or minimize suchtransmissions, since they may be intercepted and decrypted. Furthermore,since the vendor and user interact directly for the purchase and use ofelectronic tokens, rather than relying on a third party such as a bank,users may be selective about which vendors they are willing to trustwith their private information.

It will be apparent to one of ordinary skill in the relevant arts thatalthough the electronic tokens described herein may be of a singledenomination, multiple denominations of electronic tokens could beprovided. For example, a vendor may offer “silver” tokens, having a unitvalue, and “gold” tokens, having a value of ten “silver” tokens. Thevendor may optionally price the various denominations of electronictokens however he chooses. For instance, in the example given above, the“silver” tokens may be priced at ten cents each, while the “gold” tokensare priced at ninety-five cents each, giving the user a discount forpurchasing “gold” tokens.

Referring now to FIG. 1, the networked environment and apparatus of thepresent invention are described. Server computer 20 is controlled by avendor who offers products and services for sale or rental over anetwork, such as the Internet. Server computer 20 includes processor 22,memory 24, storage 26, and network interface 28. In a preferredembodiment, server computer 20 executes Web server software, throughwhich products and services are offered for sale or rental, and softwarefor issuing and handling electronic tokens, which are used to pay forthe products and services. Additionally, server computer 20 may executedatabase software, which stores information on products and services forsale or rental, and information about users and their accounts forstoring electronic tokens. If the vendor is selling or renting softwareover the network, server computer 20 may execute software that issuesauthorization codes for use of the software that is being sold orrented.

It will be understood by one skilled in the art that the functionsperformed by server computer 20 may alternatively be performed byseveral computers controlled by the vendor. In situations where thevendor is handling a high volume of orders over the network, it may benecessary to distribute the tasks performed by server computer 20 amongseveral computers for performance reasons.

Server computer 20 is connected to network 30 through network interface28. Network 30, preferably the Internet, is a communication network thatconnects server computer 20 to one or more client computers 32. Each ofclient computers 32 is operated by a user who may connect with servercomputer 20 through network 30 for the purpose of purchasing or rentingproducts and services from the vendor who controls server computer 20.Each of client computers 32 includes a processor (not shown), memory(not shown), and a display 34. Each of client computers 32 preferablyexecutes Web browser software, or other software that permits clientcomputers 32 to communicate with server computer 20. Client computers 32may also execute software that handles authorization codes for softwareproducts that are purchased or rented from the vendor who operatesserver computer 20.

Referring now to FIG. 2, the software executing on server computer 20 isdescribed in greater detail. In a preferred embodiment, server computer20 executes Web server 40, which communicates across the Internet withnumerous Web browsers to provide access to Web pages 42. Web pages 42may be predefined static Web pages, or may include Web pages that aredynamically generated, using CGI scripts, servlets, or any othertechnology that permits a Web server to dynamically generate or modifyWeb pages. For example, Web pages 42 may be generated to containinformation on products extracted from products database 47.

Server computer 20 also executes Web engine 44, which handles electronictokens, as described in detail hereinbelow. Web engine 44 communicatesbetween Web server 40 and database server 43 to handle data on users,user accounts, and other data concerning electronic tokens and users.

Server computer 20 also executes database server 43, which maintainsuser database 46, product database 47, user order and account numberdata 48, and product sold records 49. Database server 43 may also manageother databases and tables (not shown) for operating an electroniccommerce Web site.

User database 46 contains information on each user of the vendor's Website, including the user's name or other identifying information,account number, and any personal information on the user (i.e. creditcard numbers, phone numbers, address, etc.) that the vendor requires.User database 46 also preferably includes information on the number ofelectronic tokens available to each user. User database 46 may alsomaintain data on how the user has spent tokens in the past, on whetherthe user is a “preferred customer,” eligible to receive discounts ontoken purchases and other bonuses, the user's credit and payment status,and any other information that may assist the vendor to handle and trackits customers.

Product database 47 contains details about products and services offeredand their descriptions. These details preferably include at least aproduct name and a product price in tokens. Product database 47 may alsoinclude a variety of other information about products and servicesoffered by the vendor, including descriptions and images of products,information on the manufacturers of products, additional information onservices, information about the availability and stock on hand forproducts, and other information that would be useful for handlingWeb-based sales of products and services.

If the products being offered by the vendor include downloadable orrental software, product database 47 preferably contains informationabout the types of purchase or rental that are offered for each suchsoftware product. These types include:

a) permanent use;

b) rental use of a specified fixed time;

c) rental use for a specific number of times;

d) rental use for processing a specific number of a given task;

e) converting rental use from specific fixed time to an unlimitedpermanent use;

f) converting rental use from a specific number of times to an unlimitedpermanent use;

g) converting rental use from processing a specific number of a giventask to an unlimited permanent use;

h) additional fixed time for an application software already rented;

i) additional number of times to use for an application software alreadyrented; and

j) additional processing of a specific number of a given task via anapplication software already rented.

Additionally, database server 43 handles user order and account numberdata 48, which maintains user order data with cross-referencing to theuser account number while a client computer and server computer 20interact. Database server 43 also handles product sold records 49, whichkeep track of products sold for future updating of products offered atthe server. Both the user database 46 and product sold records 49 areupdated when a business transaction is completed between a user clientcomputer and server computer 20.

As will be understood by one skilled in the relevant arts, the softwarethat is described hereinabove as executing on server computer 20 may bedistributed among multiple server computers. Similarly, the databasesand other records and data maintained by database server 43 may bedistributed between multiple database servers executing on multipleserver computers.

Referring now to FIG. 3, The process for registering users with thesystem is described. In a preferred embodiment of the present invention,a user can register and establish an account over the network (on-linemethod) or using telephone, facsimile machine or mail (off-line method).It should be noted that as used herein, the use of e-mail between theuser's personal computer (PC) and the vendor is considered an off-linemethod, since communications using e-mail is not a part of the businesstransaction between the user's client computer and the vendor's servercomputer.

The registration and establishment of an account with the vendor, eitherusing the on-line method or off-line method requires a user to providethe vendor with personal information, such as name, address, telephonenumber, facsimile machine number, e-mail address, etc. To properly andsecurely identify a user, the vendor may require additional privateinformation from the user, that may include the maiden name of theuser's mother, the user's social security number, the user's birth date,and a password for use as a Personal Identification Number (PIN). Asused herein, this personal private information is collectively called“other identifiers”. These other identifiers are used from time to timeto assure proper identification of the user. The user may change his PINat any time if he so desires.

After the user provides the vendor the above information, a user isconsidered “Registered” and he is assigned an account number. This useraccount number, however, may be held inactive until the user completesthe purchase of an initial minimum number of tokens (MT), as required bythe vendor. Alternatively, the vendor may issue a number of tokens tothe user when the user opens an account, either for payment of aregistration fee, or for free, as an incentive for registration. Whenthis is done, the user's account number becomes active immediately.

Steps 101 through 103 show the process for off-line registration. Instep 101 the vendor provides a potential user information about thevendor or application service provider (ASP) which may include the typeof products it offers to sell and/or rent, the concept of using tokens,how tokens can be purchased, and the requirement for the user topurchase an initial minimum number of tokens (MT).

If the user wants to proceed, at step 102, he is asked to providepersonal information, which normally includes the user's name, address,telephone number, facsimile number, if any, and e-mail address. He alsois asked for additional personal information (i.e., other identifiers),which may include a personal identification number (PIN) which will bechangeable at the user's request. The other identifiers may also includethe user's birth date, his social security number, and his mother'smaiden name. This additional personal information (i.e., otheridentifiers) will be used, if necessary, to ensure correctidentification of the user.

In step 103, the user is asked by the vendor how he wishes to pay forthe initial minimum number of tokens (MT) required by the vendor. Thevendor may, at his option, based on information given to him by theuser, accept payment by the user's personal check, via the user's creditcard, via a purchase order, or through any other payment method that thevendor is willing to accept from the user.

Once the user and vendor have agreed upon a payment method, the vendorinputs the user's information into server computer 20. At step 104,Server computer 20 assigns a user account number, which will be inactiveuntil the user actually purchases or otherwise acquires the minimumnumber of tokens.

Next, the vendor informs the user of the account number and that thisaccount will become active only after the purchase or acquisition of theinitial minimum number of tokens (MT). When the user's payment for MT isconfirmed, or the user otherwise acquires the minimum number of tokens,the server will make the user's account number “Active”, create an entryand an account for the user in user database 46, set the user'savailable number of tokens (AT) to the minimum number of tokens, or thenumber of tokens acquired by the user, if the number is larger than theminimum (steps 105, 106, 107). Next, at step 108, the vendor informs theuser that his account number is now active and that he is ready to makepurchases.

If the on-line method is used, steps similar to those taken in theoff-line method are taken, as indicated in steps 111, 112, 113, 104,105, 106, 107, and 118. In the on-line method, communications betweenthe vendor and the user occur over the network, using Web pages, forexample. Additionally, when using the on-line method for payment, theuser may be restricted to using a credit card to purchase the minimumnumber of tokens. If the credit card number given by the user is notaccepted by a banking system accessed over the network by servercomputer 20, server computer 20 will ask the user to provide a differentcredit card number, as shown in step 114.

To avoid prolonging interaction between a client computer and servercomputer 20, after several unsuccessful attempts to process a validcredit card transaction, server computer 20 may inform the user andterminate the connection between the user's computer and server computer20, as indicated in step 115. Similarly, if the user does not completethe requested personal information as indicated in step 112, a timelimit is set, after which server computer 20 will inform the user thatthe connection with his client computer will be terminated, as shown instep 116.

Referring now to FIG. 4, a method for purchasing additional tokens fromthe vendor is described. In a preferred embodiment of the presentinvention, a user may purchase tokens using an on-line method or anoff-line method. The minimum number of tokens a user is required topurchase (MT) and the price for each token may vary among vendors.Particularly, variations may exist among vendors in foreign countriesand depending on the type or category of products they wish to sell andmarket on their particular Web site. Additionally, vendors may offerdiscounted prices for electronic tokens to “preferred” customers, orbased on the volume of tokens purchased. In accordance with the presentinvention, since each vendor issues electronic tokens to be used topurchase its products and services, each vendor may set its own pricesand policies for electronic tokens.

When using the off-line method for purchasing electronic tokens, theuser may contact the vendor using the telephone, facsimile machine,regular mail or e-mail, and identify himself by giving the vendor hisname and account number (step 201). In step 202, the operator furtherconfirms the user's identity by asking for the user's PIN and perhapsother information confirming the user's identity.

At step 203, the user tells the vendor the number of additional tokenshe wishes to purchase, and at step 204, the payment method for this newpurchase is agreed upon between the user and the vendor. This mayinclude payment by check, purchase order, by the user's credit card, orany other form of payment that the vendor is willing to accept from theuser. Once the user's payment method is accepted or payment is received,the vendor will update the user's account in user database 46, andupdate the number of available tokens (AT) in the user's account (steps206, 207 and 208). As shown in step 207, the newly purchased tokens (NT)are added to the user's available tokens (AT).

If the user elects to purchase additional tokens using the on-linemethod, steps similar to those using the off-line method are taken, asindicated in steps 211, 212, 213 and 214. As in the registrationprocess, the communication between the vendor and the user is handledover the network, for example, using Web pages. Additionally, the user'spayment options may be limited to using a credit card or other paymentmethod that can be handled over a network such as the Internet. As withthe purchase of the initial minimum number of tokens, an attempt toobtain a valid user credit card number will be made by server computer20, as illustrated in steps 215 and 216.

It should be noted that the user may purchase additional tokens evenwhile he is shopping. For example, if the user is shopping on thevendor's Web site, and discovers that his available tokens areinsufficient to cover the total cost of products and services he wishesto purchase, he may elect to purchase additional tokens. In step 217,the server recognizes such situations, and returns control back to theuser at his client computer after the tokens have been purchased. Theserver will display the last Web page viewed by the user when heswitched to purchase additional tokens.

Referring now to FIG. 5, a method for initiating shopping over thenetwork is described. A user may interact across a network, such as theInternet, with a vendor's server computer 20 using his client computer.Server computer 20 will ask the user whether he has an account with thevendor. If not, the user will be provided information on registration,and may be given an opportunity to open an account with the vendor. Atthe user's option, he may browse the vendor's Web pages and view variousproducts and services offered by the vendor. If the user already has anaccount number, the server will verify the user's identity with apassword, PIN, by use of other identifiers provided by the user, or bysome combination of these.

It should be noted that a user with an inactive account number maybrowse the vendor's Web pages to view its services and various productsbeing offered, just as may an unregistered user. However, the user maynot be permitted to go beyond selected Web pages where cost informationis listed and will not be permitted to create an order list and make anorder for purchases or rentals. These restrictions are immediatelyremoved when the user acquires the minimum number of tokens, and hisaccount number becomes active. The minimum number of tokens the userpurchased becomes his available tokens within the particular vendor Webpage from which he purchased the tokens, only for use with that vendor.

In step 301, server computer 20 sends an introductory page for displayto a client computer, which displays the introductory page to a user.This page preferably contains a message informing the user of the typesof products and services available from the vendor, and that the vendoruses electronic tokens for payment. The introductory page alsopreferably contains a proceed button, that the user may select if hewishes to proceed, and enter the vendor's Web site, and a quit button,that the user may select if he does not wish to enter. The introductorypage may also contain a home button, a back button, a forward button,and a last button, to facilitate rapid navigation through the vendor'sWeb pages.

It will be understood by one skilled in the relevant arts that displayof an introductory page is optional, and some vendors may choose not touse such a page. Additionally, the message displayed in the introductorypage will vary, according to the wishes of the vendor. Further, theabove-described buttons may optionally be omitted, greyed out if notavailable, renamed, or displayed in any usable positions on theintroductory page. One skilled in the art will further recognize thatthe introductory page may contain various types of content, includingtext displayed in a variety of fonts or styles, graphics, animations,sounds, video, or any other content that may be sent across the networkfrom server computer 20 for display on a user's client computer.

If the user chooses to proceed, at step 302 server computer 20 asks theuser if he has an account with the vendor. If the user does not have anaccount, he will be asked in step 303 whether he would like to registerand establish an account with the vendor. If the answer is yes, he willbe directed to the process of registration (either on-line or off-line),as described hereinabove with reference to FIG. 3. If the user is notready to register, but wishes to continue browsing the Vendor's site, atstep 305 he will be given an opportunity to proceed into the site, butwithout the ability to complete any purchases without first registering.

If the user already has an account, at step 304, he enters his accountID, preferably a user name or account number, and may be prompted byserver computer 20 for further identifying information, such as apassword, PIN, or other personal information. If the user correctlyidentifies himself to the vendor's system, the user may proceed withshopping. Otherwise, the user will be disconnected from server computer20.

At step 306, the system determines whether the user is interested inpurchasing or renting software or non-software products. Thisdetermination may be made by asking the user whether he is interested insoftware products and services or other products. Alternatively, thisdetermination may be automatically made, for example, for vendors who donot sell software, or who only sell or rent software for download.

If the vendor is an application service provider (ASP), who rents orsells software for download, and the user wishes to view the softwareproducts being offered, then at step 308, the system displaysdescriptions of the software products that are available, and the typesof purchase and rental that are available for each software product. Ifthe user does not wish to view software products, or the vendor is notan ASP, then at step 307, the system causes the user's computer todisplay information on non-software products and services.

The information displayed by the vendor or ASP includes the price ofeach product or service, expressed as a number of electronic tokens. Theuser's available tokens also is displayed, if the user has an activeaccount number.

Using the displays sent to his client computer by server computer 20, auser may select a subset of the products and services offered, and placethe selected products on his order list. As the user adds and removesitems from his order list, the total number of tokens required to payfor the selected products and services (RT) is constantly updated anddisplayed at the user's client computer. In this way, the user isconstantly informed whether his available tokens, which is alsodisplayed, will be enough to cover the total cost of his purchases.

If the user's number of available tokens is equal or larger than thenumber of tokens required for the products and services on the user'sorder list, the user can simply click an order button on the display topurchase or rent the items on the order list. Server computer 20 willsend a confirmation of the user's orders, including informationregarding downloading of software products, the total cost of productsin numbers of tokens, and the number of tokens that the user hasremaining in his account after the purchase.

When the user is satisfied with the order, he can click on an orderconfirmed button to complete the transaction. When an order isconfirmed, server computer 20 will subtract the number of tokensrequired for the purchase from the user's account, and cause the user'sclient computer to display an acknowledgment of the purchases. If theuser's order list included software, server 20 may start downloading thepurchased or rented software products if they are not already installedon the user's computer. If the user has purchased an extension of arental period on a software product, or the purchased or rented softwareproduct is already installed on the user's computer, then servercomputer 20 will send a new authorization code for the software.

It will be understood by one skilled in the art that the method andsystem being described in the present invention for using vendor-issuedtokens in a networked environment may be applied to both software andnon-software products and services. However, the example preferredembodiment described herein will be described in terms of an ASP, thatprovides software products for sale or rental. The sale or rental ofnon-software products is similar to the sale or rental of softwareproducts, but is somewhat simpler, since there are fewer types of saleor rental of non-software products and services, and sale or rental ofnon-software products does not involve use of authorization codes. Themethods for sale or rental of non-software products and services may beconsidered a subset of the methods used for sale or rental of software,as described hereinbelow.

Referring now to FIG. 6, a screen showing example available categoriesof software for sale or rental is shown. The example shows softwarecategory display 501 for an ASP that offers software products in thefield of Scanned Document Enhancement, Document Raster Editing, ComputerAided Design, Engineering Document Management Systems, LanguageTranslators and Computer Games. A user may select one of the categoriesby clicking the desired category. In this example, the user has selectedthe Document Raster Editing category as shown with a check mark incorresponding box 502. The user can de-select the selected category byclicking again in the check-marked box. The user can go back to theprevious display by clicking on back button 504, or proceed to the nextdisplay by clicking on proceed button 503.

In an example shown in FIG. 7, software availability page 601 displayssoftware products A, B, C, and D listed under the selected softwarecategory from software category display 501 of FIG. 6. As shown bycategory headings 602, each software product may be available forpurchase, rent by time, rent by number of uses, or rent by number ofprocessings.

Corresponding to each software product and each category heading 602,there is an availability box 603. If an availability box 603 contains acheck mark, then the corresponding software product is available in thecorresponding category heading. Thus, in the example shown in FIG. 6,software product B is available for purchase or rental by time, softwareproduct C is available for purchase or rental by number of times of use,and software product D is available only for rental by number ofprocessing tasks. The user may select the software products andcategories of rental or purchase he desires by clicking on thecorresponding availability box 603, if that availability box 603contains a check mark.

Similar to the example shown in FIG. 6, back button 605 allows the userto go back to the previous display or step, and proceed button 604 willallow the user to go to the next step. At the option of the vendor orASP, use of proceed button 604 may cause the display of a messageinforming an unregistered user that he must register before he mayproceed further. The user may then register with the vendor, followingthe method described with reference to FIG. 3.

FIG. 8 shows an example of order list display 700, in which the user hasspecified a subset of the products offered by the ASP as order list 701.With each of the software products in order list 701 the number oftokens required for purchase or rental is shown. In the example,software product A costs 100 tokens, and software product D is availableonly for rent, with a price in tokens that varies according to thenumber of processings that the user desires to access. In the example,the user has selected up to 1000 processings, at a cost of 80 tokens.

For the user's convenience, order list display 700 includes RT display705, showing the total number of tokens required for the purchase, ATdisplay 706, showing the total number of tokens available to the user,and remaining tokens display 707, showing the number of tokens that theuser will have left if the purchase is made. Each of these displaysautomatically updates as the user adds and removes items from his orderlist.

If the user wants to know more detail about the software in order list701, he can select a detail button 703 that corresponds to the productabout which he would like further information. Additionally, sincesoftware product D is being rented, installation query 704 is used toask the user whether software product D is already installed on hiscomputer. If software product D is not already installed, then servercomputer 20 must download software product D to the user's computer,along with an appropriate authorization code. Otherwise, if softwareproduct D is already installed, then server computer 20 need only send anew authorization code for the rental of software product D to beextended, saving download time and bandwidth.

Although user database 46 on server computer 20 may maintain informationon whether the user has downloaded a selected software product in thepast, it is still desirable to confirm with the user that the selectedsoftware product is installed, since the user may have removed thesoftware product from his computer, or may be accessing the ASP's Website from a different client computer. Alternatively server computer 20may automatically check for the presence of a selected software producton the user's client computer by causing the client computer to executean applet or other code to check for the presence of the selectedsoftware product.

Order list 701 may be modified by the user by clicking on the selectionbox next to the product to be added or removed. If an empty selectionbox is clicked, a check mark will appear in the box, indicating that theproduct has been selected. If a selection box containing a check mark isclicked, the check mark will be removed, and the product will bedeselected. As products are selected and deselected in order list 701,RT display 705, AT display 706, and remaining tokens display 707 areautomatically updated to reflect the number of tokens required for thepurchase, the number of tokens available to the user, and the number oftokens that would remain in the user's account if the purchase werecompleted. Once the user is satisfied with the contents of order list701, his order may be entered by selecting order button 708.

As in other displays, back button 709 will return the user to a previousdisplay if selected. Quit button 710 will immediately end the user'sconnection with the ASP's Web site, without completing the transaction.

FIG. 9 shows an example of order display 800. In this display, servercomputer 20 shows the details of the user's order in response to theuser's clicking order button 708. Final RT display 801 shows the totalnumber of tokens required for the purchase. User AT display 802 showsthe number of tokens that the user has available at the time ofpurchase. New AT display 803 shows the number of tokens that the userwill have available in his account after the purchase has beencompleted. In the example shown in FIG. 9, the purchase will require 180tokens out of the user's 500 available tokens, leaving the user with 320tokens after the purchase is completed.

If the user wishes to complete the order, he can click on orderconfirmed button 804, indicating that the order is acceptable. Whenorder confirmed button 804 is clicked, server computer 20 will cause amessage thanking the user for his purchase (not shown), and may startdownloading any software products that need to be downloaded to theuser's computer. This completes the business transaction and the usermay click quit button 806 on the display to disconnect his clientcomputer from server computer 20. If the user wants to change his orderbefore confirming it, he can click on back button 805, to return to theprevious display.

It will be understood by one skilled in the art that the exampledisplays shown in FIGS. 6, 7, 8, and 9 may be modified in many wayswithout departing from the invention. The layout of the elements on thepage, the wording of the text, and even the presence or absence of manyof the elements shown in these displays may be altered. For instance,for a non-ASP vendor, which does not offer software for download,installation query 704 of FIG. 8 would not be needed, and would not bedisplayed. Many other such modifications to the display layout and userinterface may also be made, depending on the needs and desires of thevendor or ASP.

Referring now to FIG. 10, a method for handling purchases is described.When a user places an order, as described hereinabove, the user'savailable tokens must be updated. In some cases, a user may attempt toplace an order even though he does not have enough tokens available inhis account to cover the order. If the number of tokens required for apurchase is larger than the number of tokens available in a user'saccount, the server will advise the user to either remove items from hisorder list to reduce the number of tokens required, or to purchaseadditional tokens. The additional tokens can be purchased immediatelyusing the on-line method or the user may purchase additional tokensusing the off-line method.

In step 901, the system checks the total number of tokens required for apurchase (RT) against the number of tokens available to the user (AT).If the user has too few tokens to cover the purchase, at step 902, theuser is advised of the shortage of tokens. The user is then given theoptions of removing items from his order list (step 903) or purchasingmore tokens (step 904).

If the user chooses to remove items from his order list to reduce therequired number of tokens, he may return to an order list display, suchas the one shown in FIG. 8. If the user decides to purchase more tokensfrom the vendor or ASP, he must decide whether to use the on-linepurchase method or the off-line purchase method (step 905).

For the on-line method, the user may use a credit card, as describedhereinabove with reference to FIG. 4. If the off-line method is chosen,it may not be possible for the vendor or ASP to immediately issueadditional tokens to the user, since, for example, the vendor may haveto wait for a check from the user to arrive in the mail and be processedby the user's bank. So the user does not have to go to the effort ofrebuilding his order list when he has acquired enough tokens, he will beasked to if he wants to save his order list (step 906). If the userwishes to save his order list, server computer 20 will save the orderlist in user database 46 as a temporary, uncompleted order list, in step907. In step 908, if the user does not wish to save the order list, theserver will send an appropriate message and disconnect the clientcomputer.

If the number of tokens required for the purchase is less than or equalto the number of available tokens, and the user clicks on orderconfirmed button 804. Then, at step 910, server computer 20 updates thenumber of tokens available in the user's account. This is done bysubtracting the number of tokens required for the purchase (RT) from thenumber of available tokens (AT), and saving the new number of availabletokens. Server computer 20 then updates the user database 46, andproduct sold records 49 (step 911), and sends a purchase confirmationmessage and thank you note to the user (step 912).

Finally, at step 913, if the user has purchased or rented anydownloadable software, server computer 20 downloads any software orauthorization codes that must be downloaded to the user's computer. Asexplained above, this may include a step (not shown) of determiningwhether the software has already been installed on the user's computer.If the needed software is already installed, then only an authorizationcode need be downloaded. It will be understood by one skilled in the artthat for vendors who do not offer downloadable software (i.e. the vendoris not an ASP), step 913 is unnecessary.

Referring now to FIG. 11, a method of transferring electronic tokensfrom the account of one user to another user's account is described.Such transfers provide a way for users to exchange electronic tokensissued by a vendor. This may be useful, for example, for conductingon-line auctions, in which one user of an auction Web site bids onproducts or services offered by another user of the auction site.Instead of sending money to the seller to pay for goods, the buyertransfers electronic tokens issued by the auction site to the seller.Transfer of tokens also may be useful on sites where the vendor does notallow tokens to be converted back to real money, as a way of givingunused tokens to those who may be able to use them.

At step 1001, server computer 20 will ask the user his account number.Next, at steps 1002 and 1003, server computer 20 will request otherpersonal information, such as a PIN number from the user, to furtherverify the user's identity.

Having verified the identity of the user from whom the tokens are beingtransferred, at step 1004, the system next obtains the identity of thesecond party to whom the tokens are being transferred. In a preferredembodiment, the identifying information on the second party includesseveral fields, such as a name and address, that can be cross-checked,to confirm that there has not been an error in entering the informationon the second party. To further confirm that there is no error, the userconducting the transfer may be asked whether he knows the second party'suser account number. If this is not known, the server will obtain theaccount number from user database 46, and check to see if the secondparty is registered and has an account number with the server. If theserver failed to find the second party's record with a valid accountnumber, it will so advise the user and terminate the connection, asshown in step 1005.

If the second party has an account number, at step 1006, server computer20 will ask the user the number of tokens he wants to transfer. In step1007, server computer 20 will verify that the user has enough tokensavailable to allow the user to make the requested transfer. If not, instep 1008, the server will request that the user reduce the number oftokens to be transferred, advising him that the number of tokensavailable to him is insufficient. If the user does not wish to reducethe number of tokens being transferred, at step 1009, the transferoperation will end without completing the transfer of tokens.Alternatively, the vendor may offer to sell the user additional tokens,so that the transfer may be completed.

If the number of tokens being transferred is less than or equal to thenumber of tokens available in the user's account, then at step 1010 and1011, server computer 20 subtracts the number of tokens beingtransferred from the user's account, and updates user database 46 withthe new number of tokens, and a record of the transaction. At steps 1012and 1013, the transferred tokens are added to the account of the secondparty (i.e. the recipient), and user database 46 is updated to recordthe transfer of the tokens. Finally, at step 1014, server computer 20displays the user's new number of available tokens, and informs the userthat the designated number of tokens have been transferred to the secondparty.

In accordance with the principles of the present invention, since thevendor controls all aspects of token use on the vendor's site, tokensmay only be transferred between users with accounts maintained by thatvendor. Thus, tokens issued by one vendor may not be transferred to anaccount maintained on a different vendor's system. Similarly, tokenspurchased from one vendor cannot be used to purchase products orservices at a different vendor's site.

Referring now to FIG. 12, a flow chart illustrating a method ofverifying authorization codes for use with rental software is shown. Asexplained hereinabove, through use of electronic tokens, users are ableto make micropayments and conduct other low-overhead transactions thatmake rental of software products for a limited number of uses or alimited number of processings practical. Application service providers(ASPs) may offer access to a variety of downloadable software forpurchase or rental. To insure that users do not exceed their allottedrental period, an authorization code is sent to the rental software thatallows it to determine whether its use is authorized.

At step 1101, the software decodes the authorization code. Typically,authorization codes will be encrypted or otherwise encoded withinformation such as a time stamp or authorization code number thatprevents a user from altering or duplicating an authorization code.Thus, to use an authorization code, the code should first be decryptedor decoded.

At step 1102, if the decoding of the authorization code failed, and useof the software product is not authorized, the software will display amessage to the user advising him that the software is not authorized,and exit. Additionally, the software may automatically invoke a Webbrowser or other network tool to connect the user to an ASP who can sellthe user a new authorization code for the software, in exchange forelectronic tokens.

At step 1103, if the authorization code was valid, the softwaredetermines the type of the authorization code. If the authorization codeauthorizes permanent use of the software product, the verificationprocess is over, and the software may execute. Otherwise, theauthorization software must determine whether there is any time, uses,or processings left on the authorization code, depending on the type ofauthorization code.

If the authorization code is of a type that permits a number ofprocessings, the software checks to see if the number of processings iszero (step 1104), or low (step 1105). If there are no processings left,the software displays a message, and exits. If the number of processingsremaining is low, the software displays a message warning the user thatthe number of processings is low (step 1106), and continues. In eitherof these cases, the user may be automatically connected with an ASP, andbe given the opportunity to use electronic tokens to purchase additionalprocessings.

If the authorization code indicates that there are still processingsremaining, at step 1107, the software subtracts one from the number ofprocessings, and at step 1108, the process is executed. Once the processis finished, it may be repeated until no processings remain.

If the authorization code is of a type that permits a number of days ofuse, or another time-based rental, the software checks to see if thereis any time remaining (step 1110), or if the remaining time is short(step 1111). If the time period of the rental has expired, the softwaredisplays a message, and exits. If the remaining time is short, thesoftware displays a message warning the user that the amount of timeremaining is low (step 1112), and continues. In either of these cases,the user may be automatically connected with an ASP, and be given theopportunity to use electronic tokens to purchase additional time on therental. If the authorization code indicates that there is still timeremaining, at step 1113, the application program is executed.

If the authorization code is of a type that permits a fixed number ofuses of the application program, the software checks to see if there areany uses remaining (step 1115). If so, one use is subtracted from theremaining uses (step 1116), and the software checks to see if theremaining number of uses is low (step 1117). If the remaining number ofuses is low, the software displays a message warning the user that thenumber of uses remaining is low (step 1118), and continues. In either ofthese cases, the user may be automatically connected with an ASP, and begiven the opportunity to use electronic tokens to purchase additionaluses of the rental software. Finally, at step 1113, if there was atleast one remaining use of the software, the application program isexecuted.

It will be understood by one skilled in the art that there may be otherterms for which software may be rented, and that the above-describedauthorization method could be easily modified to handle other types ofsoftware rental. The ability to use electronic tokens to reduce theoverhead of software rental transactions, and the use of authorizationcodes to verify the legitimate use of rented software and to avoidunnecessary downloads facilitate a variety of software rental models.

Referring to FIG. 13, an alternative embodiment of the electronic tokensystem of the present invention for use on an auction site or other sitethat facilitates transactions between users of the site is shown. Vendor1201, instead of directly selling products and services, as inpreviously described preferred embodiments, acts as an intermediarythrough which users can sell products and services to each other.Additionally, vendor 1201 buys and sells electronic tokens that may beused by the users to transact business. By using electronic tokens aspayment between users for products and services, the users are able toquickly and easily pay each other for products and services, withouthaving to obtain and send a money order, as is typically required bysellers on current auction sites.

Vendor 1201 provides both on-line and off-line sale of electronictokens, as described in detail hereinabove. Additionally, vendor 1201may permit electronic tokens to be redeemed for money, either on-line,through issuing a credit on a credit card, or off-line, by issuing andmailing a check for redeemed tokens.

Sellers 1202 are users of the Web site or other e-commerce venue offeredby vendor 1201. Through vendor 1201, who may receive a commission, feeor other payment, sellers 1202 offer products and services for sale orauction, with prices or minimum bids listed in tokens.

Buyers 1203 use the Web site provided by vendor 1201 to purchaseelectronic tokens from vendor 1201, and to purchase products andservices from sellers. Buyers 1203 pay for products or services, orplace bids for products and services using electronic tokens. Sellers1202 may be paid for their products or services by transferring theappropriate number of electronic tokens between the accounts of buyers1203 and sellers 1202.

Sellers 1202 may use the electronic tokens that they gain from sellingtheir products and services to purchase products and services from othersellers. Alternatively, sellers 1202 may sell their tokens back tovendor 1201 for money.

This system offers numerous advantages over current auction sites andother venues for conducting e-commerce between individuals. First, theindividual buyers 1203 and sellers 1202 are able to easily arrangepayment, rather than requiring that checks or money orders be sent.Additionally, there is no need for buyers 1203 and sellers 1202 indifferent countries to be concerned about currency exchange, since alltransactions are handled in electronic tokens, which may be bought andsold by vendor 1201 for any form of currency that vendor 1201 chooses toaccept. Further, vendor 1201 can make his “commission” on sales on thesystem by buying electronic tokens back from sellers 1202 at a differentprice than they are sold to buyers 1203, thereby simplifying the task ofcollecting payment from sellers 1202.

It will be understood by one skilled in the art that the embodiment ofthe present invention described with reference to FIG. 13 may be usedfor more than just auctions between individual buyers and sellers. Thebuyers and sellers may be businesses or other corporations, and there isno need that the transactions be carried out in auction style. Similarmethods may be used in which sellers 1202 simply list their products andservices with vendor 1201, with prices in electronic tokens, and buyers1203 buy the products and services from sellers 1202 through vendor1201, using electronic tokens as the exclusive means of payment. Asdiscussed above, only electronic tokens issued by the vendor may betransferred or used on that vendor's site.

While preferred illustrative embodiments of the present invention aredescribed above, it will be evident to one skilled in the art thatvarious changes and modifications may be made without departing from theinvention. For example, electronic tokens may be given away in contestsor as incentives, or different forms of on-line and off-line payment maybe accepted at the option of vendors. It is intended in the appendedclaims to cover all such changes and modifications which fall within thetrue spirit and scope of the invention.

Because the vendor is the issuer of the electronic tokens, informulating these prices, he may set the value of the token to any levelthat he chooses. Under the present invention the vendor has the totalcontrol of the distribution and to set the value of the tokenscompletely free from a bank or other organization to issue the tokens.The user purchases tokens directly from the vendor, in any way hechooses, either using on-line or off-line methods, without the need toinvolve a bank. Therefore, the methods and apparatus as invented is a“closed” system.

While the vendor lists the prices of the products and services offeredon his web site in terms of electronic tokens, it is also desirable thatthe vendor also lists these prices in actual currency side by side withthe corresponding number of tokens. This will help the user to associatethe price between the electronic tokens and the actual currency, in casethe vendor sets the price of each electronic token at a higher valuethan the smallest unit of the actual currency. Furthermore, the vendormay allow a user to purchase products and services offered on his website, either using electronic tokens or a credit card. This provides theuser a choice of method of payment prior to his getting familiar withstrictly using electronic tokens.

A further embodiment of the present invention is now described. Thequestion arises as to how a user who registered with a token mall website is allowed to purchase products or services from other vendors whoalso use electronic tokens for his web site. Furthermore, each vendorhas the complete freedom to set the value of the tokens at his web site,the value of tokens may vary from one vendor's web site to anothervendor's web site.

The present invention provides a Vendor Mall (Web Site) ServicesProvider (MSP) which allows a user of a Vendor Web Site to purchaseproducts and services from another vendor's web Site seamlessly withouthaving to concern himself with different values of tokens. The MSPinvented here also automatically sends the user's information from thevendor with whom he registered to another vendor's web site where hewants to have his electronic tokens transferred and to purchase itemsand services offered at another vendor's Web Site. This allows the othervendor to automatically register the user coming from the different WebSite. It therefore provides the convenience that a user is not requiredto register at each and every Web Site where he wishes to make purchasesprovided that they offer electronic tokens and honor tokens from anotherparticipating Web Site.

The MSP in the method and system of the present invention will alsomonitor transferring of tokens among member malls. For example, the MSPcan prevent transferring of tokens issued from a mall whose performanceis not meeting the standards of business practice established by the MSPin order to participate in the mall program. It can also shut down amall for further on-line business using tokens. This preserves theintegrity of use of token systems by vendors. Furthermore, the methodand system, as invented, also keeps record of paid tokens, tokens to bepaid (tokens issued to preferred customers in advance of payment) andfree tokens issued as part of the vendor's incentive program, similar tofrequent flyer programs. This is important because the vendor may decideto issue free tokens to a user who has already purchased tokens (nottokens to be paid) in his account but has not used them for awhile. Thiswill give the user the perception as if he is receiving an interestpayment like depositing his money in a bank.

The method and system keeps the record of free tokens issued to a userhoping that the user will use free tokens he received to purchase moreproducts and services from the vendor, not to transfer these free tokensto other vendor malls, thus retaining customer loyalty. The method andsystem as invented provides a means to prevent transferring of freetokens to other vendor malls.

Furthermore, the MSP will display all malls with whom the user has anaccount together with available tokens and free tokens in eachrespective mall. This provides the user with the convenience to managehis accounts since he may have accounts with many malls and may need toknow from which mall he wants to transfer tokens to a new vendor mall.

The MSP will perform the following tasks:

(1) Keep track of the value of tokens as set by each vendor for his WebSite.

(2) Keep track of each vendor who will accept other vendors' tokens andpermit users of other vendors to purchase products or services from hisWeb Site.

(3) Send the user's information to another vendor, allowing the othervendor to register that user.

(4) Convert one vendor's tokens to other vendors' tokens, allowing auser of one vendor's Web Site to purchase products or services offeredby the other vendor's Web Site.

(5) When a user of a vendor's Web Site A transfers his tokens to anothervendor's Web Site B, through the MSP, the MSP computes the value oftokens transferred from Web Site A to Web Site B in order that Web SiteA can pay Web Site B for the value of tokens so transferred.

(6) At an appropriate time, normally at the end of each month or atother regular intervals as mutually agreed upon, the MSP serves to clearaccounts between member vendors under the MSP services.

(7) Monitor transfer of tokens between malls to prevent transfer oftokens issued by a mall whose business integrity or performance does notmeet the high contractual standards established by the MSP.

(8) Prevent a mall to further use the tokens as the price for productsand services by a vendor, if the vendor does not keep up with thehighest quality in offering and delivering products and services or whootherwise does not comply with contractual obligations set by the MSP.

A similar situation exists when a vendor with many chain stores underfranchise and each having his own Web Site, will want a user who isregistered at one of the franchised store's Web Site to purchaseproducts or services offered at the other franchised store's Web Site.Although one would expect that the value of tokens will be the samethroughout the franchised chain stores, the parent vendor could have aprogram similar to the MSP that will allow a user registered at one ofthe franchised stores to purchase products and services offered by theother franchised store. These franchised stores could then clearaccounts between themselves at a pre-determined frequency.

The present invention provides a method and system for conductingbusiness transactions in a networked environment using electronic tokensas a price for each product or service being offered for sale or rentalby a vendor. The present invention permits the vendor the completefreedom to set the value of each token. The user may purchase thevendor's tokens either on-line (e.g., using a credit card) or off-line(e.g., using a check, money order or purchase order) at any time. Nobank or any third party intermediary is involved in the settlement ofthe business transactions between the vendor and the user. In thissense, the present invention represents a “closed” system.

It is desirable that a user registered with a vendor who uses tokens asa price for each product or service for sale or rental be able topurchase products or services offered by other vendors who also usetokens as a price for products or services offered for sale or rental,at their Web Site (“Malls”). This eliminates the requirement of havingthe user register at the other vendor's Malls to purchase theirelectronic tokens. The method and system as invented permits a user,registered at any vendor Mall, to purchase products or services from anyother vendor Malls, as long as each Mall agrees to accept the othervendor Mall's tokens for later settlement between those Malls. Thetransfer of tokens between one vendor to the other and settlement ofmoney associated with transferring of tokens between Malls are performedby the Mall Service Provider (MSP), as shown in FIG. 14, 1300.

Referring to FIG. 14, each of the solid arrows indicates steps (1)-(14),which represent a transaction in the direction of the arrow. User 1,1401 received a certain amount of Token-A issued by Mall A, 1301, asshown in Step (1). User 1 pays Mall A for the cost of Token-A hepurchased, as shown in Step (2). Note that the operator of Mall A, 1301,may at his own discretion, provide a certain amount of Token-As to user1, 1401, prior to receiving payment from user 1. Such is not the casewhere the operator of Mall C, 1303, chooses to have user 2, 1402, makethe payment, Step (11), before he grants a certain amount of Token-Cs,Step (12), to user 2, 1402.

In FIG. 14, user 1, 1401, wants to purchase products offered by Mall B,1302. He requests Mall A, 1301, to transfer a certain amount of hisToken-As to Mall B, 1302, and to receive the equivalent value ofToken-Bs from Mall B, 1302. Steps (3), (4), (5) and (6) show the processof token transfer from Mall A, 1301, through the MSP, 1300, to Mall B,1302, for user 1, 1401. Steps (7) and (8) show that user 1, 1401,purchases products from Mall B, 1302, using Token-B.

Since Mall A, 1301, at the request of user 1, 1401, transferred acertain amount of Token-As purchased by user 1, to Mall B and since MallB issued an equivalent value of Token-Bs to user 1 at Mall A's request,Mall B should receive payment for that amount of Token-Bs it issued touser 1 from Mall A. The settlement of the payment between Mall A andMall B is performed by the MSP, 1300. This is shown in Steps (9) and(10).

Similarly, a user registered at Mall B, 1302, may purchase products andservices offered at Mall A, 1301, by requesting Mall B, 1302, totransfer a certain amount of Token-Bs to Mall A, 1301, through theservice of the MSP, 1300.

The present invention provides a method and system for a user registeredat a vendor mall to purchase products or services at another “MemberMall,” without requiring the user to register at another Member Mall.The term “Member Mall” referred to herein indicates any vendor mall whoagrees to accept tokens of the other vendor mall and convert the othervendor mall's token to its own tokens of equivalent value to the userwho registered at the other vendor mall. In FIG. 14, Mall A, 1301, MallB, 1302, and Mall N, 1304, are Member Malls, while Mall C, 1303, is nota Member Mall.

It would be appropriate to say that the method and system as inventedbecomes an “open” system with the services of the MSP, which providesthe exchange of tokens and settlement services among a group of MemberMalls, which are “closed” systems. FIG. 15 shows an example of a vendor,who has several franchised stores, each is a vendor by itself. Referringto FIG. 15, each of the solid arrows indicates steps (1)-(14), whichrepresent a transaction in the direction of the arrow. Here, the user 1,1701, registered at sub-mall Mall-A1, 1601, by purchasing tokens A1first, then purchased product offered at Mall-A1, 1601, using hisTokens-A1. Steps (1), (2), (3), and (4) show these processes. In FIG.15, user 2, 1702, requests Mall-A2, 1602, where he registered, totransfer a certain amount of his Token-A2 s, to Mall-A3, 1603, fromwhich he is granted an equivalent amount of Token-A3 s and purchasesproducts offered at Mall-A3, 1603. This is shown in Steps (7), (8), (9),and (10) for transferring tokens and Steps (11) and (12) for purchasingproducts. Steps (13) and (14) indicate that Mall-A2 pays Mall-A3 fortransferring Tokens-A2 paid by user 2, 1702, to Mall-A3, 1603, for it togrant Tokens-A3 to user 2, 1702. As shown in FIG. 15, since sub-malls,Mall-A1, 1601, Mall-A2, 1602, and all other sub-malls, Mall-A3, 1603,and Mall An, 1604, are all part of franchise stores of the parent mall,Mall-A, 1501, as shown in FIG. 15, the value of tokens for each sub-mallwill normally be the same, as determined by the parent company; in thiscase, Mall-A, 1501. The computer program at Mall-A, 1501, keeps therecord of user shopping activities among its sub-malls and provides thepayment settlement amount between sub-malls. These services are the sameas the services provided by the MSP, described earlier, except that theMSP keeps an additional record of the different values of tokens, set byeach individual Member Mall operator.

The method and system as invented, permits a vendor to set any pricelevel for his tokens, it may be desirable, as shown in FIG. 16, that thevendor displays the cost of products or services at his Web site, bothin terms of tokens, as well as, in actual case equivalent value. Thismay help the user to associate the cost more easily. Furthermore, as useof electronic tokens for purchasing products or services at a vendor'sWeb site is a new concept, the present invention provides the user witha choice to pay for products or services, using tokens or his creditcard. Until such time that the user becomes more comfortable purchasingtokens, the vendor may determine that providing a choice between creditcard and tokens is no longer necessary as its users become more familiarwith the use of tokens and appreciate the benefits of using tokensinstead of their credit card.

What is claimed is:
 1. A method for conducting electronic commercetransactions with a merchant comprising: receiving a request for anelectronic commerce transaction with a vendor from a user using a clientdevice; registering the user with the vendor; determining whether theuser has adequate funds to finance the purchase of electronic tokensfrom the vendor, the electronic tokens being issued and redeemable bythe vendor, each of the electronic tokens having a predetermined nominalvalue; selling electronic tokens to the user responsive to thedetermination of whether the user has sufficient funds; storing thepurchased electronic tokens in a user account with the vendor;determining whether the user has a sufficient number of electronictokens in the user account to cover a purchase of at least one of aplurality of products or services offered by the vendor; enabling theuser to order at least one of the plurality of products or servicesoffered by the vendor if a determination is made that the user's accountbalance contains a sufficient number of electronic tokens; enabling theuser to make a purchase selection from amongst the plurality of productsor services offered by the vendor, the purchase price being set at aninteger multiple of the electronic tokens; transmitting a confirmationto the user summarizing the electronic commerce transaction; andelectronically delivering the purchase selection to the user; whereinthe receiving, determining, selling, storing, enabling, transmitting,and delivering are each performed by a server computer of the vendor. 2.The method of claim 1, further comprising establishing the account. 3.The method of claim 1, wherein the step of electronically deliveringincludes transmitting an authorization code.
 4. The method of claim 1,further comprising: requesting account information from the user if adetermination is made that the user has no account that permits the userto conduct electronic commerce transactions with the vendor; andreceiving the account information from the client device.
 5. The methodof claim 1, further comprising preventing the user from viewing aportion of information relating to the plurality of products or servicesoffered by the vendor if a determination is made that the user has anaccount balance less than the predetermined amount.
 6. The method ofclaim 1, further comprising preventing the user from viewing a portionof information relating to the plurality of products or services offeredby the vendor if a determination is made that the user has no accountthat permits the user to conduct electronic commerce transactions withthe vendor.
 7. The method of claim 1, further comprising presenting theuser with descriptions of the plurality of products or services.
 8. Themethod of claim 1, further comprising updating the account balance basedon the purchase selection.
 9. The method of claim 1, further comprisingenabling the user to confirm the purchase selection.
 10. The method ofclaim 1, further comprising the step of enabling the user to trade atleast some of the electronic tokens with another user.
 11. The method ofclaim 10, wherein the vendor receives a commission from the tradebetween the users.
 12. The method of claim 1, wherein the user providespersonal information to the vendor upon the purchase of the electronictokens, and wherein the personal information is fed into a userdatabase.
 13. The method of claim 1, further comprising the step ofcreating commercial agreements between different vendors, wherein theelectronic tokens issued by a first vendor are accepted for payment by asecond vendor.
 14. The method of claim 13, wherein the electronic tokensare accepted for payment by the second vendor at a discount.
 15. Themethod of claim 13, further comprising the step of establishing aninterpayment system between the first and second vendors to account forpurchases at the second vendor with electronic tokens issued by thefirst vendor.
 16. The method of claim 13, wherein the user providespersonal information to the first vendor upon the purchase of theelectronic tokens, wherein the personal information is fed into a userdatabase of the first vendor, and wherein the second vendor has accessto the user database.
 17. A method for conducting electronic commercetransactions with a vendor comprising: registering a user with thevendor; determining whether the user has adequate funds to finance thepurchase of electronic tokens from the vendor, the electronic tokensbeing issued and redeemable by the vendor, each of the electronic tokenshaving a predetermined nominal value; selling electronic tokens to theuser responsive to the determined adequacy of funds; storing theelectronic tokens in a user account with the vendor; receiving a requestfor information regarding a selected one of plurality of products orservices offered by a the vendor from a user using a client device;receiving a request from the user to make a purchase selection fromamongst the plurality of products or services offered by the vendor;determining whether the user has a sufficient number of electronictokens in the user account to cover a purchase of at least one of aplurality of products or services offered by the vendor, the purchaseprice being set at an integer multiple of the electronic tokens;enabling the user using the client device to order a plurality ofproducts or services offered by the vendor if a determination is madethat the user's account balance contains a sufficient number ofelectronic tokens; transmitting a confirmation to the user summarizingthe electronic commerce transaction; and electronically delivering thepurchase selection to the user; wherein the receiving, determining,enabling, transmitting, and delivering are each performed by a vendorserver computer.
 18. The method of claim 17, further comprisingrequesting at least one of personal information and payment informationfrom the user.
 19. The method of claim 18, further comprisingmaintaining a record of the electronic commerce transaction.
 20. Themethod of claim 19, further comprising providing a database for storingthe record.
 21. The method of claim 17, further comprisingauthenticating the user.
 22. The method of claim 17, wherein thedescription comprises at least one of a title, size, estimated downloadtime, payment information, and price of the item.
 23. The method ofclaim 17, further comprising: prior to enabling the user to select anitem for purchase from the vendor, enabling the user to identify anaccount to be used to pay for the purchase; and enabling the user to addfunds to the account.
 24. The method of claim 23, further comprising:during enabling the user to add funds to the account, obtaining a creditstatus for the user; and determining whether to approve addition offunds to the account based on the credit status for the user.
 25. Themethod of claim 17, further comprising notifying the user regardingwhether the purchase was approved.